Job Evaluation

Job Evaluation is a systematic process for defining the relative worth or size of jobs within an organization in order to establish internal relativities and provide the basis for designing an equitable grade and pay structure, grading jobs in the structure and managing relativities. Job evaluation can be analytical or non analytical.

Analytical job evaluation schemes

These are schemes in which decisions about the value or size of jobs are based on an analysis of the extent to which various defines factors or elements are present in a job. These factors should be present in all the jobs to be evaluated and the different levels at which they are present indicate relative job value. The equal Pay (Amendment) Regulations (1983) refer to the demands on a worker under various headings, for instance, efforts, skills, decision. The most common analytical approach is a points-factor scheme where there is a Factor Plan which defines the factors and their levels and attaches scores to each level. Following job analysis, scores for each factor are awarded and then totaled. On completion of an evaluation program, the total scores for job indicate their rank order. This type of scheme can meet the requirements of equal value law as long as it is not in itself discriminatory either in its design or application. To ensure that equity considerations are catered for in an organization, it is preferable to cover the key features of each category of job at every level.

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Non-analytical job evaluation scheme

These are schemes in which whole jobs are described and compared in order to place them in rank order or in a grade without analyzing them into their constituent parts or elements. The most common non analytical approach is to match roles as defined in the role profiles to definitions of grades or bands (this is often referred to as job classification), or to the role profiles of jobs that have already been graded. When designing grade structures, however, the initial step may be to rank the jobs in order of perceived value individual in the job must not be taken into account. But it should be noted that white performance is excluded, in todays more flexible organizations the tendency is for some people, especially knowledge workers, to have flexible roles. Individuals may have the scope to enlarge or enrich their roles and this need to be taken into account when evaluating what they do, as long as this is appropriate within the context of their basic role. Roles can not necessarily be separated from the people who carry them out. It is people who create value, not jobs. It is necessary to distinguish between the concept of a job and that of a role. A job consists of a group of finite tasks to be performed (pieces of work) and duties to be fulfilled in order to achieve an end-result. Job descriptions basically list a number of tasks. A role describes the part played by people in carrying out their work by working competently and flexibly within the context of the organizations culture, structure and processes. Role profiles set out the behavioral requirements of the role as well as the outcomes expected of those who perform it.

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Concerned with internal relativities When used within an organization, job evaluation can only assess the relative size of jobs in that organization. It is not concerned with external relativities, that is, the relationship between the rates of pay of jobs in the organization and the rates of pay of comparable jobs elsewhere (market rates).

Methods
The methods and practices of ordering jobs or positions with respect to their value or worth to the organization.

Advantages

Ranking This method is one of the simplest to administer. Jobs are compared to each other based on the overall worth of the job to the organization. The 'worth' of a job is usually based on judgments of skill, effort (physical and mental), responsibility (supervisory and fiscal), and working conditions.
Disadvantages
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y y

Simple. Very effective when there are relatively few jobs to be evaluated (less than 30).

1 .Ranking

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Difficult to administer as the number of jobs increases. Rank judgments are subjective. Since there is no standard used for comparison, new jobs would have to be compared with the existing jobs to determine its appropriate rank. In essence, the ranking process would have to be repeated each time a new job is added to the organization.

Ranking Methods 1. Ordering Simply place job titles on 3x5 inch index cards then order the titles by relative importance to the organization. 2. Weighting 3. Paired Comparison Grouping: - After ranking, the jobs should be grouped to determine the appropriate salary levels.

2. Classification
Classification Jobs are classified into an existing grade/category structure or hierarchy. Each level in the grade/category structure has a description and associated job titles. Each job is assigned to the grade/category providing the closest match to the job. The classification of a position is decided by comparing the whole job with the appropriate job grading standard. To ensure equity in job grading and wage rates, a common set of job grading standards and instructions are used. Because of differences in duties, skills and knowledge, and other aspects of trades and labor jobs, job grading standards are developed mainly along occupational lines. The standards do not attempt to describe every work assignment of each position in the occupation covered. The standards identify and describe those key characteristics of occupations which are significant for distinguishing different levels of work. They define these key characteristics in such a way as to provide a basis for assigning the appropriate grade level to all positions in the occupation to which the standards apply.

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Advantages
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Disadvantages
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Simple. The grade/category structure exists independent of the jobs. Therefore, new jobs can be classified more easily than the Ranking Method.

Classification judgments are subjective. The standard used for comparison (the grade/category structure) may have built in biases that would affect certain groups of employees (females or minorities). Some jobs may appear to fit within more than one grade/category.

Tips Use Well Defined Grades/Categories Attempt to define the grades/categories so that they do not overlap one another. Overlaps in the descriptions and factors used to identify the grade would lead to problems when assigning jobs to the grades where there is overlap between them.

3. Factor Comparison

Factor Comparison A set of compensable factors are identified as determining the worth of jobs. Typically the number of compensable factors is small (4 or 5). Examples of compensable factors are: 1. 2. 3. 4. Skill Responsibilities Effort Working Conditions

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Next, benchmark jobs are identified. Benchmark jobs should be selected as having certain characteristics. 1. equitable pay (not overpaid or underpaid) 2. Range of the factors (for each factor, some jobs would be at the low end of the factor while others would be at the high end of the factor). The jobs are then priced and the total pay for each job is divided into pay for each factor. See example matrix below:
Job Evaluation: Factor Comparison

Job Secretary Admin Assistant Supervisor Manager

Hourly Rate $9.00 $11.00 $15.00 $21.00

4.50 5.50 6.00 9.00

A
3.50 3.50

This process establishes the rate of pay for each factor for each benchmark job. Slight adjustments may need o be made to the matrix to ensure equitable dollar weighting of the factors. The other jobs in the organization are then compared with the benchmark jobs and rates of pay for each factor are summed to determine the rates of pay for each of the other jobs.

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2.00 2.50 2.00 2.50 4.00 7.00

The hourly rate is divided into pay for each of the following factors: Pay for Pay for Pay for Pay for Working . Skill Effort Responsibility Conditions 0.50 0.50 1.50 1.50

Advantages
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Disadvantages
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The value of the job is expressed in monetary terms. Can be applied to a wide range of jobs. Can be applied to newly created jobs.

The pay for each factor is based on judgments that are subjective. The standard used for determining the pay for each factor may have build in biases that would affect certain groups of employees (females or minorities).

Tips Few Factors Use a few well identifiable factors.

4. Point Method

These factors can then be further defined. 1. Skill 1. Experience 2. Education 3. Ability 2. Responsibilities 1. Fiscal 2. Supervisory

1. 2. 3. 4.

Skill Responsibilities Effort Working Conditions

Point Method A set of compensable factors are identified as determining the worth of jobs. Typically the compensable factors include the major categories of:

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3. Effort 1. Mental 2. Physical 4. Working Conditions 1. Location 2. Hazards 3. Extremes in Environment The point method is an extension of the factor comparison method.

Advantages

A
y y

Jobs are then grouped by total point score and assigned to wage/salary grades so that similarly rated jobs would be placed in the same wage/salary grade.
Disadvantages The pay for each factor is based on judgments that are subjective. The standard used for determining the pay for each factor may have built-in biases that would affect certain groups of employees (females or minorities).

y y y

The value of the job is expressed in monetary terms. Can be applied to a wide range of jobs. Can be applied to newly created jobs.

Tips Factors Use well defined factors.

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Each factor is then divided into levels or degrees which are then assigned points. Each job is rated using the job evaluation instrument. The points for each factor are summed to form a total point score for the job.

USES OF Job Evaluation

Compensation the methods and practices of maintaining balance between interests of operating the company within the fiscal budget and attracting, developing, retaining, and rewarding high quality staff through wages and salaries which are competitive with the prevailing rates for similar employment in the labor markets.

Shaheer Impex

Its a packaging manufacturing firm, there are total 4 partners who have invest on equal basis and profit sharing with same equal ratio. Our main Manufacturing unit is situated in Faisalabad and we have set up different sales offices outside Punjab as well. Someone has rightly said that organization are people and people are organization like all other organizations success is due to the collective effort of workers and dynamic marketing, management and sales force. Our firm has a good job structure build on the sound principals of HRM, the structure defines clear hierarchy in each department from lower to the top.

As job evaluation means systematically determining relative worth of job to create job structure, Shaheer Impex has practicised this job evaluation structure to set up its simple and easy to understand job

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structure. Things like goods advance booking, maintaining healthy account records, labor issues and direct dealing with customers on phone or visiting their places are key issues. All these jobs have their special importance individually as well as collectively. Firm has set up its department and selected the personals very easefully. The accounting department has its two sun units 1. Computer based records and 2. Manual record, both types of accounting procedures has a good coordination that is the key for the success of the firm. On the other side marketing and sales forces are working together to have a good coordinating atmosphere. The higher management is also trying its level best to cooperate and coordinate with these departments. Firms employees are also enjoying working there and they also have reasonable amount of salaries and bonus on special occasions like Eid etc. we cant say that everything is being done perfectly at our firm, all the criterias, plans and policies need to be adjusted as per situation and time demands.

Strengths and Deficiencies

No firm can claim that they have a perfect system regarding anything, each and every system have its weaknesses and key points. Those are now discussed in detail in perspective of Shaheer Impex.

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Strength Firm has a simple and easy to understand job structure, the job hierarchy is closely defined Everyone knows very clearly to whom is to answer, each employee knows what are the responsibilities and duties. Easy to evaluate As the job structure is easily comprehend and understandable, so the evaluation process is also easy to conduct and exercised.

Availability of financial resources

Good market Opportunities Firms main business is PVC packaging selling which has a good scope as its an essential item in Home textile Export which is one of the growing sectors of Pakistan in current decade. Sound Credit Standing Firm has a sound credit standing in the financial market. The firms dont have to pay any outside debit balance. No evasion of Tax

Firm has sound financial resources and also has ability to survive it in the dealing business situations.

Workers at firm though not highly educated and trained, but their large field experience and knowledge has made the workforce skilled and master in the specific fields.

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Skilled workers

Firm is contributing large amounts of tax to the Govt. revenue. Even the general sales tax registration has also been done and paying 16% GST to Govt. on every order. Societal Marketing Firm is also working for the welfare of the society. We are helping many charity organizations, school and colleges where the children of poor and needy people are learning modern arts and knowledge.

Deficiencies: -

Huge amount of Debtors

Its the biggest weakness of firm that has to recover a huge amount of debt out of huge Textile market, which is the most difficult task to execute and no doubt the fund has to spend large amount of time and money to recover this unpaid amount of money from different customers belonging to different areas of the country. Mixed up structure For some reasons we can say that firms hierarchical structure is mixed up, in some situations the workers are unaware of their responsibilities.

All customers are to be treated equally, but sometimes its not practical at Shaheer Impex, especially when customer creates problems in payments clearance and customers with small orders. Since regular customers are entertained all the times in same manners.

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Discriminator among customers

Lack of Coordination Sometimes lack of coordination occurs due to mixed up job structure which results in losses of both material and time. Time to come and not to go At manufacturing unit there is no time to come for labor and not to leave the work which is considered as big misfortune for the employees.

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